Business leaders urge George Osborne to drive growth

BUSINESS leaders will today urge Chancellor George Osborne to “pull out the stops” to enable companies to drive Britain’s economic growth.

George Osborne at the World Economic Forum in Davos earlier this year []

The British Chambers of Commerce believes a double-dip recession will be avoided after the economy contracted 0.2 per cent in the fourth quarter of last year but has downgraded its GDP growth forecast for this year from 0.8 per cent to 0.6 per cent before predicting an upturn to 1.8 per cent in 2013.

With the Bank of England expected to mark three years of record low interest rates this week by holding the base rate at 0.5 per cent, the BCC predicts this figure will remain until the final months of 2013 because of the weak growth outlook.

The Chancellor must pull out the stops to enable British businesses to drive growth here at home

British Chambers of Commerce director general John Longworth

However, it does not expect more money to be pumped into the economy beyond the current £325billion quantitative easing programme.

BCC director general John Longworth warned that while it is important that Britain’s credibility in international markets is maintained by the deficit reduction programme, Osborne must deliver a Budget later this month to “bring confidence to businesses”.

He said: “The Chancellor must pull out the stops to enable British businesses to drive growth here at home. There is room within the current spending envelope for measures that will encourage firms to export, invest and grow. Only the private sector will drive recovery and help deliver public services.

“Real deregulation, a simple easy- to-use planning system, improving the flow of credit to firms and improving our lacklustre infrastructure and skills system – these are measures businesses want to see from a Government confident enough to take radical measures to squeeze every last drop out of the UK economy.”

With the Government coming under renewed pressure from business leaders to consider expansion of London’s Heathrow airport to improve air links to emerging markets such as China and India, the BCC called for the Budget to include an aviation strategy that also delivers growth opportunities for regional airports.

It also believes consideration should be given to creating an SME (small and medium-sized enterprises) bank to improve the flow of credit to viable businesses and radical planning system reforms to boost business expansion.

Although the Chancellor unveiled a plan in his autumn statement to encourage private sector pension schemes to invest £20billion in infra- structure – stimulating growth by bankrolling the building of power stations, roads and railways – he was urged to speed up reform.

Business organisation the CBI said there are 52 major proposed projects in the pipeline, including wind farms and nuclear power stations, which have yet to reach application stage.

“But investors both at home and abroad must have the confidence that the planning system will deliver timely decisions, so the Government needs to act now. Waiting for a much fuller review in 2014 would be a lost opportunity.”